Peer-to-peer (P2P) file-sharing technology offers significant benefits but also poses risks to consumers who use it, according to a Federal Trade Commission staff report issued today. The staff report, "Peer-to-Peer File-Sharing Technology: Consumer Protection and Competition Issues," analyzes the consumer protection, competition, and intellectual property issues that were discussed at the FTC's December 2004 workshop on P2P file sharing. The report recommends that industry and government take steps so that consumers receive the many benefits from this technology while avoiding the risks that it creates.

P2P technology enables computer users to share communications, processing power, and data files with other users. Use of P2P technology can yield significant benefits, such as enhancing efficiency by allowing faster file transfers, conserving bandwidth, and reducing storage needs. Businesses, government agencies, academic institutions, and others use P2P applications for a variety of tasks. However, the most common application by far is commercial file-sharing software programs used by consumers to exchange files, such as music and movie files, with others; information presented in the FTC's report indicates that tens of millions of individuals have used a P2P file-sharing program.

The FTC staff's report states that the workshop provided "valuable insight." It concludes that P2P technology continues to evolve in response to market and legal forces. Consumers face risks when using commercial P2P file-sharing software programs, including risks related to data security, spyware and adware, viruses, copyright infringement, and unwanted pornography. There was little empirical evidence submitted in connection with the workshop, however, addressing whether these risks are greater with P2P file-sharing programs than with other Internet-related activities such as surfing websites, downloading software, and using e-mail or instant messaging.